Prime Minister Hon. James Marape has reiterated Papua New Guinea’s steadfast commitment to macroeconomic stability, fiscal reform, and debt sustainability during a high-level meeting with the International Monetary Fund (IMF) at its headquarters in Washington, D.C.
The meeting was held with Deputy Managing Director Mr. Bo Li, who oversees PNG’s economic programme at the IMF. Prime Minister Marape was warmly welcomed by Mr. Li and his senior economic advisory team, highlighting the strong and collaborative relationship between PNG and the IMF.
The discussions were described as open, constructive, and comprehensive, with both parties reaffirming their shared dedication to advancing PNG’s economic transformation.
Strategic Engagement with IMF: A Deliberate Policy Shift
Speaking after the meeting, Prime Minister Marape emphasized that the renewed engagement with the IMF was a deliberate and considered policy decision taken by his government in 2019, shortly after assuming office.
“We made a conscious decision to invite the IMF back into Papua New Guinea after years of ad hoc and unsustainable fiscal practices,” he said.
“Our goal has always been to place the country on a disciplined and transparent economic path, reduce reliance on commercial loans, and align ourselves with credible multilateral institutions that promote good governance and long-term development.”
He noted that unlike previous reliance on high-interest commercial loans and short-term financing arrangements, PNG’s partnership with the IMF, World Bank, and Asian Development Bank is based on mutual respect and shared responsibility. These institutions are internationally mandated agencies with proven track records in supporting economic reforms worldwide.
Progress on Home-Grown Reform Agenda
The meeting acknowledged the significant progress PNG has made since 2020 in implementing its comprehensive home-grown reform agenda. Central to this agenda is a 33-point reform programme developed with support from the Treasury, Bank of PNG, and the IMF.
The Prime Minister confirmed that most reforms have been successfully implemented, with only a few outstanding actions to be addressed in the coming months.
“Papua New Guinea’s reform journey is not dictated by the IMF. These are reforms we initiated ourselves, recognising the urgent need for structural change,” said Prime Minister Marape.
“We must take ownership of our future and lay a strong foundation for the next 50 years.”
Debt Reduction and Budget Balance in Sight
Prime Minister Marape reaffirmed his government’s commitment to achieving a balanced national budget by 2027. From 2028 onward, PNG plans to aggressively reduce its debt, anchored by the implementation of a Sovereign Wealth Fund expected to be fully operational by then.
“If we stick to our fiscal consolidation path, eliminate wastage, and grow our revenue base, we will reduce our debt-to-GDP ratio to sustainable levels—targeting 30 percent or lower,” he stated.
“By 2033, we aim to eliminate all public debt accumulated since Independence in 1975—a historic milestone for our nation.”
Strong Economic Outlook Amid Global Uncertainty
According to IMF projections shared during the meeting, PNG’s economy is expected to grow by 4.7 percent in 2025, outpacing the global average of 3.7 percent and outperforming most Pacific Island Forum and ASEAN economies. The IMF attributed this growth to prudent fiscal management, recovery in non-resource sectors, and sustained reform momentum.
Prime Minister Marape noted PNG has experienced four consecutive years of non-resource sector growth, led by agriculture, fisheries, forestry, and small-scale enterprise, signaling diversification beyond extractive industries.
“For the first time in our post-Independence history, we are seeing consistent growth from sectors that benefit our rural population. This is no accident—it is the result of targeted investment and reform,” he said.
Diversification, Innovation, and Digital Government
During the meeting, Prime Minister Marape proposed new areas for IMF technical assistance, including:
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Establishing AI-driven digital platforms for public procurement and recruitment to enhance transparency and merit-based selection
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Expanding renewable energy generation through hydro, geothermal, and solar technologies
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Utilising domestically available natural gas to power island provinces and supply neighbouring Pacific nations
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Strengthening capacity to manage the Sovereign Wealth Fund transparently and effectively
“These initiatives will modernise government, attract private investment, and ensure efficient delivery of public services,” he said.
IMF Commends PNG’s Reform Commitment
The IMF welcomed PNG’s clear vision and fiscal discipline, acknowledging progress in clearing foreign exchange backlogs, stabilising the kina, and improving macroeconomic management. The Fund recommended that PNG consider incentives to encourage exporters to repatriate foreign currency earnings, which would further stabilise the balance of payments.
In closing, the IMF commended Prime Minister Marape and his government for maintaining reform momentum despite challenges including the COVID-19 pandemic and global economic volatility.
“This was a deeply encouraging conversation,” Prime Minister Marape concluded.
“Papua New Guinea is firmly on the right path. We have come a long way since 2019. There is more work to do, but with discipline, we will emerge stronger, more resilient, and more prosperous.”
Prime Minister Marape has now concluded his official engagements in Washington, D.C. and is returning to Papua New Guinea.